Best Term Life Insurance: Am Ratings And Reviews

AM Best is a rating service that provides financial strength ratings for insurance companies. These ratings indicate an insurer's ability to pay future claims. AM Best's ratings are used by consumers to assess the financial stability and reliability of insurance providers. When it comes to term life insurance, AM Best's ratings play a crucial role in helping individuals make informed decisions about their coverage options. Term life insurance is a type of life insurance that offers coverage for a specific period, usually at fixed rates. It is often considered a budget-friendly option, with many competitively priced policies available in the market. Various factors influence the choice of a term life insurance company, including coverage amounts, term lengths, age restrictions, and the ability to convert the policy to permanent coverage. Reputable companies with high AM Best ratings, such as Guardian, MassMutual, and Northwestern Mutual, offer a range of term lengths, competitive rates, and additional benefits, ensuring peace of mind for individuals and their families.

Best term life insurance companies

Term life insurance is a simple and affordable type of life insurance that covers you for a set number of years, generally between 10 and 30 years. If you die within that period, your family will receive a death benefit. If you live beyond that period, your policy lapses and has no value.

Guardian Life Insurance

Guardian offers a range of policies, including term, whole, and universal life insurance. It has strong financial strength ratings and has been offering insurance for over 160 years. Their term life insurance can be converted into whole or universal life policies, and they offer an additional rider that allows you to convert a level-term policy to a permanent life insurance policy at any time while the policy is in force. Guardian also offers coverage for people living with HIV, making it a good option for applicants with health conditions.

Amica

Amica offers term and whole life insurance policies with a terminal illness rider at no extra charge. Their whole life insurance policies are payable for 20 years or until the ages of 65 or 100. Amica stands out for its numerous discounts and its online quotes and applications, which can simplify the process of purchasing term life insurance.

Northwestern Mutual

Northwestern Mutual is the largest life insurer by market share in the US and has strong ratings for financial strength and customer satisfaction. They offer a variety of life insurance products, including annual renewable term life insurance and level premium term life insurance. Their policies include a waiver of premium rider, which can help cover the cost of your policy if you're facing a disability. However, their policies must be purchased through a financial professional.

State Farm

State Farm offers a variety of term, whole, and universal life insurance products, as well as strong customer service and financial stability. They have earned top marks for customer satisfaction in J.D. Power's life insurance customer satisfaction survey for four years in a row. Some of their term life insurance policies offer savings on auto insurance, and they also offer an instant answer term life insurance policy that provides coverage for 10 years or until the age of 50, whichever is longer.

Bestow

Bestow offers a term life insurance policy to those ages 18 to 60 with up to $1.5 million in coverage. Their policies are instant and do not require a medical exam. Bestow's policies are offered entirely online and can be applied for in minutes, making them a good fit for those who want a hassle-free way to purchase term life insurance.

Ladder

Ladder is a digital-first life insurance company that offers term life insurance without a medical exam. Their policies are issued by several large insurers and offer coverage of up to $3 million, with the ability to adjust your coverage as your needs change. Ladder is a good option for those seeking an affordable and convenient term life insurance solution.

Factors affecting term life insurance rates

Term life insurance is usually the most budget-friendly option, with many competitively priced policies available. However, several factors affect the rates you'll be offered.

Age, Gender, and Occupation

Your age, gender, and occupation are among the first things insurers will consider when determining your risk level and the rate you'll be offered. The younger you are, the less likely you are to die, so the lower your monthly life insurance quotes. Women generally pay less than men because, according to the CDC, life expectancy for females is roughly six years longer than for males.

Health

Your health is another crucial factor. Insurers will consider your height, weight, prescriptions, medical conditions, smoking status, substance abuse history, and the health history of your parents and siblings to predict your life expectancy. They may also require you to take a medical exam.

Driving Record

Infractions on your driving record, such as DUIs and reckless driving, will also affect your risk level and, consequently, your rate.

Credit and Finances

Life insurers sometimes use risk scores that take into account your credit history and public records, such as bankruptcies.

Risky Hobbies

Finally, risky hobbies like aviation and scuba diving can lead to higher rates or even cause your application to be declined.

Pros and cons of term life insurance

Term life insurance is a popular option for those seeking life insurance. It is a type of policy that offers financial protection for a set period, usually 10 to 30 years. If the insured dies during this term, a death benefit is paid to the beneficiaries. This type of insurance is often sought by individuals who need coverage during specific times in their lives. Here are some pros and cons to help you decide if term life insurance is right for you.

Pros of Term Life Insurance

• Affordability is a key advantage. Since it provides coverage for a specific period and lacks the investment component found in permanent life insurance, the premiums of a term life insurance policy are generally lower, making it a more budget-friendly option.
• More coverage is available. You may be surprised to find that you need $1 million or more in life insurance. With a term life insurance policy, you can buy $10 million or more in life insurance at an affordable price.
• The death benefit is tax-free. If you die during your policy term, your beneficiary will receive a lump sum from the life insurance company, free of tax.
• Term life insurance offers flexible payment and policy options. You can choose to pay your premiums monthly, quarterly, semi-annually, or annually. You can also choose how long you need coverage, whether for one year or 30. The most common terms are in increments of five years, from five to 30 years.
• There is no penalty for canceling. If you decide to cancel your term life insurance policy while it’s active, you can do so without incurring any fees or penalties.

Cons of Term Life Insurance

• Term life insurance only offers temporary coverage, so it may not be suitable for those with permanent life insurance needs, such as funeral expenses or caring for a special-needs child into adulthood.
• Term life insurance does not build cash value, meaning it does not include a savings account to borrow or withdraw from. If you cancel a term life insurance policy, you don't get any money back unless you have a policy with a return-of-premium feature, which comes at a higher cost.
• Term life insurance has a lower age cap than permanent life insurance. The maximum age limit varies by company and term length, but most people can only apply up to age 50 for all term lengths. Term life insurance for 60-year-olds or older may be limited to a 10- or 20-year term without the option for a 30-year term.

How to find the best term life insurance company

Calculate how much coverage you need

First, think about your current and future expenses, such as childcare, utility bills, groceries, tuition, and mortgage payments. Once you have a number, subtract the value of any assets you own. The final figure is the gap a term life insurance policy can help fill.

Consider additional riders

Most companies allow you to customise your term policy with life insurance riders for a fee. These provide additional coverage, such as an accelerated death benefit rider, which lets you access the policy payout if you get sick, or a waiver of premium rider, which pauses your premiums if you become disabled or unemployed.

Get prices from several companies

The cost of coverage varies among insurers, so compare quotes from multiple companies. Choose a financially strong company with a high credit rating, such as an A- or higher rating from AM Best, to ensure they can pay claims far into the future.

Look for online tools and no-exam policies

Prefer companies that offer online quoting and application tools, transparent pricing, and no-medical-exam policy options.

Value customer service

Choose a company that values customer service and offers features like live chat, credit card payments, and quick issue coverage. Check their ratings for customer satisfaction and complaints.

How to buy term life insurance

Term life insurance is a type of life insurance that provides a lump sum, also known as a "death benefit", to a chosen beneficiary if you die within the time period of the policy. It is usually the most affordable option for those who want life insurance to cover financial obligations that are temporary.

Calculate how much coverage you need

Generally speaking, you should buy enough life insurance coverage to replace the income you earn for your family, including "hidden" sources of income like health insurance and 401(k) matching, plus a little extra to cover your final expenses. A good rule of thumb is to buy a policy worth 10 times your annual salary, plus an extra $100,000 to $150,000 per child to cover college expenses.

Compare quotes from different companies

Once you have determined how much coverage you need, compare quotes from a handful of reputable companies. Research the following:

• AM Best rating: Evaluates a company's financial stability.
• J.D. Power ranking: Rates companies based on a variety of consumer-focused criteria.
• NAIC complaint index: Provides a complaint score based on the number of complaints relative to the company's size.
• Customer reviews on independent review sites: Gives insight into customers' first-hand experience.

Consider additional riders

You can customise your term policy with life insurance riders for a fee. These provide additional coverage. For example, an accelerated death benefit rider allows you to access your policy's payout if you get sick, and a waiver of premium rider pauses your premiums if you become disabled or unemployed.

Fill out an application

Many life insurance companies allow you to complete an application online. One of the main differences between applications is whether you need a medical exam. Some insurers require it, but others offer no-medical-exam life insurance to applicants in excellent health.

Pay your first premium

Your life insurance policy begins as soon as you've signed your policy documents and paid your first premium. Most companies will allow you to pay online via credit card, but some may require a check or bank transfer.

Frequently asked questions